The Big US Corporate Squeeze

While the come-back of financial sector profits in US is more than impressive, especially assuming the "God's Work" they do on the yield curve, there has not been a lot of noise about non-financial profits lately.

The graphical depiction of US financial profits is so stunning that nothing else was left as to reproduce it from Ritholtz' s The Big Picture here again, click on picture to enlarge.

Well, but economists at BNP Paribas shared couple of words on US non-financial profits last week:

Profits at financial companies surged 15.6% q/q in Q4 2010 following a 10.4% increase in Q3, while profits at non-financial companies declined for the first time since the end of the recession, by 1.1% q/q. Rest-of-world profits dropped most in Q4, declining 2.5%.


In 2011, corporate profits may get squeezed on all sides.


Corporations have limited ability to pass higher input costs onto consumers given sluggish wage growth. In addition, continuing gradual increases in payrolls should curb productivity growth.

Click on charts to enlarge, courtesy of BNP Paribas.

Those bears getting boring?